tag:theconversation.com,2011:/fr/topics/bulk-billing-7011/articlesbulk-billing – The Conversation2023-05-10T12:44:16Ztag:theconversation.com,2011:article/2054312023-05-10T12:44:16Z2023-05-10T12:44:16ZThe day after the night before - Chalmers and Taylor on the budget<p>Will the budget make inflation worse? Are its boosts to welfare payments just the first step for the Labor government? Could the projected one-off surplus be followed by another one or more? What (if any) of the budget measures will the Coalition oppose? There’s quite a bit about this budget that, as the saying goes, “only time will tell”. </p>
<p>In this podcast, Treasurer Jim Chalmers defends his budget from those economists who claim it will be inflationary, and strongly rejects suggestions it doesn’t have much for middle income Australians struggling with rising mortgage payments. Chalmers also promises that, given the current tight labour market, a priority in coming months will be finding ways to help more of the long-term unemployed into jobs. </p>
<p>Shadow treasurer Angus Taylor lists some of the measures the opposition supports but will not commit on the changes to the Petroleum Resource Rent Tax, despite the sector’s benign attitude to the cautious revamp.</p>
<hr>
<p>E&OE TRANSCRIPT
PODCAST INTERVIEW
THE CONVERSATION
THURSDAY, 11 MAY 2023</p>
<p>SUBJECTS: May Budget, inflation, interest rates, cost of living, NDIS, Petroleum Resource Rent Tax, JobSeeker, welfare increases, stage three tax cuts, surplus, labour market.</p>
<p>MICHELLE GRATTAN, HOST: Jim Chalmers, the economic argument about this Budget has come down to whether it will or will not add to inflation. A number of economists say it will, but you strongly reject that. Can you just take us through briefly your argument about why those economists are wrong.</p>
<p>JIM CHALMERS, TREASURER: Well, first after all there’s a lot of economists who have my view, including the considered advice of the Treasury. And the reason for that is because what we’ve done is we’ve designed the cost-of-living package in particular, to be particularly cognisant of the inflationary pressures in the economy. It’s spread out over four years – not all of the money hits the economy at once. And if you think about the next year, which is the year that the Opposition is focused on, a big chunk of the money we’re spending next year is the funding for the programs which are obviously ongoing but weren’t funded in an ongoing way. There’s also the impact of the small business tax breaks and some other reasons. So, overall, our Budget is designed to take some of the edge off these cost-of-living pressures, not add to the inflationary pressures in the economy, and you can see that in the Treasury’s forecasts.</p>
<p>GRATTAN: So you’re confident that the Reserve Bank will think that you’ve helped it, not hindered it in its push to contain inflation?</p>
<p>CHALMERS: Well, I’m always careful, as you know, Michelle, I don’t want to put words in the Reserve Bank Governor’s mouth in particular, they take their decisions independently. But obviously I wouldn’t be handing down a Budget that made their job more difficult. And in the context of the energy plan, the energy relief payments and some of the other measures in the Budget, we’re going out of our way to make their job easier.</p>
<p>GRATTAN: Now, in the Budget you’ve increased JobSeeker and related payments by a small amount. Do you see this as a first step only in raising these payments? You know you’ll have more advocacy from your inclusion advisory group next year, because that’s an ongoing exercise?</p>
<p>CHALMERS: Two quick things about that, I mean, first of all, having just handed down a Budget with an increase to the base rate of JobSeeker and the associated payments - and I’m not flagging what we might do in 364 days’ time in the next Budget or whenever it is - but the second point I’d make is that as a Labor government – and the Prime Minister makes this point repeatedly – we’re always looking to do what we can to help people, but we do that within the constraints of a really responsible Government and a really responsible Budget. And I think the overwhelming story out of this Budget is the fact that we’ve been able to be responsible and compassionate at the same time.</p>
<p>GRATTAN: Now, of course, we always seem to return to the stage three tax cuts. We’ve had two Budgets now where there’s been pressure, to which the Government hasn’t responded, to refashion those tax cuts. I know you say you’ve got no plans to do this, but can we take this as a never-ever pledge – that they’re definitely here to stay?</p>
<p>CHALMERS: Well, the point that I would make about that, Michelle, is similar to the point I’ve made all the other times I’ve been asked, including at the National Press Club after the Budget – and that is, changing these tax cuts wasn’t even part of our deliberations in this Budget. And our position hasn’t changed. That’s why the Budget doesn’t reflect any change. And they come in in more than a year’s time, but it hasn’t been something that we’ve been contemplating. I get asked from time to time from both directions – people want me to either guarantee it or they want me to say that they we will abolish them. We haven’t changed our position despite all the pressure coming at us from both directions. We think it’s important that you return bracket creep, particularly for people on lower and middle incomes - I said that at the Press Club as well. And we need to remember that these tax cuts kick in 45 grand, and we’ve always supported tax relief for people on modest incomes.</p>
<p>GRATTAN: You’d always have the option of going to an election to promise to do something later, of course.</p>
<p>CHALMERS: I’m not speculating about that. We haven’t changed our position. We’ve got a Budget which has done as much as we can, frankly, for the most vulnerable people, the people on the lowest incomes, and I’m proud of that.</p>
<p>GRATTAN: You’ve been a bit sensitive today when people have pointed out that the Budget doesn’t have anything particularly special for middle-income, mortgage-stressed people. Why do you refute that proposition?</p>
<p>CHALMERS: I don’t feel like I’m especially sensitive about it, but I do think it’s complete and utter rubbish. And the reason I think that is because we’ve been really careful in prioritising the most vulnerable. We haven’t neglected middle Australia. For example, big changes to bulk billing, a centrepiece of the Budget. A lot of people with kids under 16 will benefit from that right up and down the income scale. Cheaper early childhood education. We’ve actually copped a lot of flak for being too kind to middle Australia in our early childhood policies. They kick in on the 1st of July. Energy efficiency measures, the training package, the home guarantee, there’s a whole bunch – there are a whole bunch of policies in the Budget for middle Australia. It’s just that the focus of a lot of the commentary has been what we’re doing for the most vulnerable people. That’s a good thing from my point of view, we are doing what we can there but that doesn’t mean we’re neglecting middle Australia.</p>
<p>GRATTAN: The Budget forecasts some $15 billion in savings from the National Disability Insurance Scheme. That’s a big amount of money. What will be involved, and do you think people on the scheme will be alarmed, because this is a particularly delicate area for obvious reasons?</p>
<p>CHALMERS: Look, it is. I acknowledge that. And that’s why both in the Budget speech and in the speech the following day I’ve gone out of my way to say that our objective here – our number one objective – is to make sure that people are getting the care that they need and deserve and that was intended when we designed the scheme in the first place. But we need to get a handle on some of these increasing costs in the system. And Bill Shorten has been doing a terrific job working with the NDIA and the sector and others, and Anthony Albanese with the state and territory leaders to try and moderate the growth in the program, not because we want to cut it for its own sake but because we want to make sure we’re getting value for money for people who need it and rely on it.</p>
<p>GRATTAN: But you’re pointing to these savings, and that inquiry into the scheme hasn’t even reported – won’t report for a few months yet.</p>
<p>CHALMERS: But, I mean, as you would appreciate from – you know, you would have seen some of these processes before, there’s often kind of iterations, there’s often engagement with the review panel as it continues its work. And what we saw – what we would have seen in the Budget is about a $17 billion increase in the cost of the NDIS. There’s about $15 billion of savings that were able to be found to moderate that growth.</p>
<p>GRATTAN: That’s pretty huge.</p>
<p>CHALMERS: Well, I think it shows –</p>
<p>GRATTAN: 15 out of 17.</p>
<p>CHALMERS: Well, I think it shows that if you put the effort into it, making sure that every dollar goes to the people who need it in the scheme, you can make the scheme more sustainable. You can put it on a more sustainable footing. That’s what I want to see, because I believe in the NDIS. I want it to be here to stay, and in order for it to be here to stay we’ve got to moderate some of these costs.</p>
<p>GRATTAN: As Treasurer you give the impression that you’ve been much influenced by working for a Treasurer. And as a staffer, of course, you went through the Labor Government’s trauma with its resources tax. In undertaking changes announced in this Budget to the Petroleum Resource Rent Tax, you treated the sector really very much with kid gloves. You’ve engaged with that industry. How much were you influenced by your own experience before?</p>
<p>CHALMERS: I think everybody is in one way or another. I like to think that I’ve got my eyes forward in the job that I want to do and not trying to –</p>
<p>GRATTAN: But you’ve got a few scars from the past.</p>
<p>CHALMERS: I think everyone does, from their own experiences. I don’t want to pretend that I haven’t learned a lot in that pretty remarkable apprenticeship that I was fortunate to have. I mean, nobody’s come to this job –</p>
<p>GRATTAN: Don’t mention tax inquiry.</p>
<p>CHALMERS: Well, nobody’s come to this job with the kind of apprenticeship that I had for it, and I’m grateful for that. And most days I reflect on something I’ve learned, as people would in all walks of life in their work. But I try and look forward. I want to make my time in this job really count, and one of the things that I’m pleased about in extracting $2.4 billion of extra tax sooner out of offshore LNG projects -yes I went about it in a consultative way, that’s the tone that Anthony Albanese sets for his Government. That’s his expectations of us. If you can get a good outcome from working with people rather than against them, then I would have thought the onus is on all of us in all of our portfolios to try.</p>
<p>GRATTAN: Now, you’re celebrating a surplus for this financial year, although there are a couple of months to go.</p>
<p>CHALMERS: You won’t be seeing any Back in Black mugs or anything from me, Michelle, or any self-congratulation. There’s good reasons to be cautious.</p>
<p>GRATTAN: Just fingers crossed. But the Budget then projects deficits in the later years. But I’m just wondering whether there might be, not a trick here, but some optimism that’s not reflected in those figures – in other words, is it not possible, certainly next financial year, that with the savings, with the stream of revenue that’s still to come you could, in fact, get a surplus next financial year?</p>
<p>CHALMERS: Well, I’m not prepared to pre-empt that, and I don’t want to get ahead of ourselves. And I think there are genuinely good reasons to be cautious and careful and conservative, including, the history of my immediate predecessor that I just joked about. There is no point over promising and under delivering here. I’d rather avoid that.</p>
<p>GRATTAN: But you might over-deliver after the under-promising?</p>
<p>CHALMERS: Well, it remains to be seen what happens with the labour market, what happens with commodity prices and a range of other influences on the Budget. But I think there’s a good reason to be cautious and conservative, and that’s what I’m being.</p>
<p>GRATTAN: Now, I just want to finish on the labour market, and something that I asked you earlier at the Press Club, because I think it’s important and something our listeners would be interested in. The Budget does not focus much attention, even with this tight labour market, on getting the long-term unemployed into jobs. What priority are you giving this? What more can you do about it? And what’s your thinking ahead?</p>
<p>CHALMERS: Yeah, very important priority; very, very high on our list. And one of the reasons I’m so proud of the place-based initiatives for communities where we’ve had entrenched disadvantage and intergenerational long-term unemployment is we need to think differently about the communities, frankly, like the one I grew up in and the one that I represent now.</p>
<p>GRATTAN: Just explain that place-based community program.</p>
<p>CHALMERS: So there are programs around Australia which find the communities with a lot of disadvantage and they try and apply a hyperlocal approach with great local leaders backed by the Commonwealth Government to try and break the cycle of intergenerational disadvantage. And it involves the philanthropic sector, it involves all of the community organisations, support from all three levels of government. And what I’ve seen in my own community, a program called Logan Together and a guy called Matthew Cox, who’s been central to all my thinking on this, is if we get a good model and we can apply it to other communities like Logan around Australia, we give ourselves a chance of breaking this cycle so that we have fewer long-term unemployed people. And so we intervene early in people’s lives and all of these sorts of things that are really important. So that’s part of the thinking. You’ve asked me before about employment services. That’s important too. Surely we can do better there. I mean, surely. And so we’ve got an Employment White Paper. My colleague Julian Hill and others are doing a heap of work at the committee level to see if we can do that better. Tony Burke is in charge of that as the Employment Minister, and so I’d happily work very closely with him to see if we can make improvements there. But I think the overall objective is really important. When we’ve got unemployment three and a half per cent, even if it gets to four and a half per cent on the Budget forecasts, we need to do a much better job of actually hooking people up with the opportunities of a growing job-creating economy. Employment services, the Employment White Paper, the place’s based programs, the participation agenda we have around early childhood education, all of these things are important. We’ve done a heap of work, but there will be more to do.</p>
<p>GRATTAN: Jim Chalmers, thanks very much for talking with us today.</p>
<p>CHALMERS: Thanks for the opportunity, Michelle.</p>
<p>ENDS</p>
<hr>
<p>TRANSCRIPT
INTERVIEW WITH MICHELLE GRATTAN,
THE CONVERSATION
Wednesday 10th May 2023
Topics: Budget 2023
E&OE </p>
<p>MICHELLE GRATTAN: Angus Taylor, you’ve condemned this as a high taxing, high spending Labor budget, to what degree and where should the taxing and spending have been lower?</p>
<p>ANGUS TAYLOR: Well, can we start with the facts because it’s very important to understand the baseline here. Labor’s added $185 billion of spending since they got into government and crucially, in the new initiatives they’re pursuing. There’s $2 of spending for every dollar of revenue. And so, at a time when we need a budget that’s responsible to take pressure off inflation, that’s not what’s needed. Now, there’s many areas where we’ve already outlined our view, that spending is not appropriate at the moment. $45 billion of spending we’ve opposed in the Parliament in recent months, about $18 billion of interest cost attached to that. We do think that adding over 10,000 new public servants at the moment is not the right answer, particularly at a time when we do need to put this downward pressure on inflation. Outside of national security and frontline services there’s real questions about whether that is needed. </p>
<p>MICHELLE GRATTON: Well, what about the welfare spending, though? You’re saying there should be less of that, those initiatives?</p>
<p>ANGUS TAYLOR: Well, we’ll work through all of these, and we have our own processes as you know.</p>
<p>MICHELLE GRATTON: Sure, but they’re pretty obvious. </p>
<p>ANGUS TAYLOR: Well, no, because you’ve got to go through your process and make decisions as a Shadow Cabinet and I always respect that process and we should, you know, that’s how these things work. What I would say in general, as a matter of principle right now is that what really is needed is dealing with inflation at the source, not dealing with it through the symptoms. There’s no point putting a band aid on a bullet wound, you’ve got to go to the source and a budget that puts downward pressure on inflation is good for all Australians. Everybody is better off including the most vulnerable, you don’t have to pick and choose. We all benefit from the prices of the goods and services we buy being lower than they otherwise would be. </p>
<p>MICHELLE GRATTAN: But even taking that point, nevertheless, we’re in a situation where the very vulnerable people on JobSeeker and so on are needing more money, needing more assistance. Are you saying that was inappropriate? </p>
<p>ANGUS TAYLOR: I’m saying that the risk with this strategy is that you give with one hand and take away more with the other and we are seeing, we’ve got stagnant real wages in this election cycle over three years. They’re not growing, and that’s in the Budget papers. It’s very clear.</p>
<p>MICHELLE GRATTAN: But they are starting to grow over this next year.</p>
<p>ANGUS TAYLOR: In this election cycle, under Labor’s government real wages are flat. Over the three years and you know, this is real pain that’s being felt. There’ll be people listening to this out there now who feel substantially worse off than they were a year ago. And the truth is, if you’re a family with a mortgage right now, a typical family will be $25,000 a year worse off than they were a year ago. That is that is what inflationary pressures and interest rate pressures do to people’s standard of living. And the key here is to go to the source with a budget that is good for all Australians. You don’t need to discriminate. Everyone is better off. If you can take pressure off inflation. That should have been the focus of this budget, and it wasn’t.</p>
<p>MICHELLE GRATTAN: Now let’s go to this question of inflation and dig down. Jim Chalmers claims that the budget won’t put pressure on inflation. The Opposition says it will. What is your evidence? What is your argument that it will be inflationary?</p>
<p>ANGUS TAYLOR: Well, a couple of things I’d say, first is you’ve got two independent economists saying it will be inflationary people like Chris Richardson and Stephen Hamilton, have all made this point. Chris Richardson was very strong last night straight out of the box, saying that this will be inflationary.</p>
<p>MICHELLE GRATTAN: He’s had a bit of a clip around the ear from the Prime Minister.</p>
<p>ANGUS TAYLOR: Well, I mean, you know that’s how Labor works. If someone says something that Labor doesn’t like, they clip people around the year. That’s unfortunate, but the truth is, he is speaking out because if you have $185 billion of new spending since, they got into government, $2 of spending initiatives versus every dollar of revenue initiative, that is expansionary. Now, right now, we don’t need that. I mean, we know historically, if you want to deal with inflation, you’ve got to see fiscal consolidation. We also know the best kind of fiscal consolidation is to make sure your economy grows faster than you spend. We confronted this in the past. If you don’t have that you end up where we ended up in the 70s and 80s where central banks have to do all the work and the pain is enormous, Michelle, we, many of us, certainly my age and older remember that only too well and that’s not where we want to be in the coming months and years.</p>
<p>MICHELLE GRATTAN: So, do you think that this budget will push up interest rates?</p>
<p>ANGUS TAYLOR: I’m not going to make a forecast on interest rates. I mean, the Treasurer loves to make forecasts. Lots of people have been trying to forecast inflation and interest rates and frankly, they’ve largely been wrong. We saw, even last week, the Reserve Bank raised interest rates, the pundits, the capital markets, they all had it wrong. Economists had it wrong. So, the truth of the matter is the inflationary pressures have been stronger than has been predicted, substantially stronger than has been predicted and that’s why now it’s incumbent on the Government to take that risk away, to take those pressures off every Australian. There was an opportunity here to unite Australians behind the one thing that is hurting all of us. There was an opportunity to do that. They’ve missed that opportunity and I think both in terms of what’s right for Australia and politically frankly, there’s been a real opportunity missed, and it’s incredibly disappointing.</p>
<p>MICHELLE GRATTAN: But when you say there was an opportunity, what positively should have been done?</p>
<p>ANGUS TAYLOR: Well, I’ve already said a number of things, but I’ll add to that. The first and most striking thing of all, when you read the Budget papers is one of the first things I look to. So, when you look at the fiscal strategy, there is no commitment to budget balance in this fiscal strategy. Now since the charter of budget honesty was put in place in the 1990’s under Peter Costello, there has always been a commitment to budget balance. It’s gone. And the reason is…</p>
<p>MICHELLE GRATTAN: Well, we’ve got it now though. </p>
<p>ANGUS TAYLOR: Well, hang on, for a year after an $80 billion windfall, when as I think I’ve said to you before, we had a budget coming out of the pandemic through to the May election that was already in balance, but from here on in the Treasury is taking it over a cliff, going out to an over $36 billion deficit. That’s not expansionary, that’s inflationary. If you take a budget that’s in balance, and then you turn it into a big deficit. It’s pretty it’s pretty straightforward. I don’t know how you can argue that that’s not expansionary.</p>
<p>MICHELLE GRATTAN: Isn’t it possible, though – and we’ve seen changes over forward estimates, incredibly, over recent years – isn’t it possible that the deficit that’s forecast could be reined in a lot with spending cuts, for example to the NDIS? </p>
<p>ANGUS TAYLOR: Look I don’t know. Look I read the budget and I assume that’s the Government’s plan. I don’t have any other plan to work on Michelle. So that is their plan. That’s what they put out. They just put out all the details and I think that’s what we’ve got to assume that their plan is right now. Now if they plan, more spending and more taxes, they should tell us.</p>
<p>MICHELLE GRATTAN: Now, I heard you say last night that the Opposition supported the energy price help and had done so all along. But in fact, you opposed the legislation that was part of that.</p>
<p>ANGUS TAYLOR: Oh, well, you know, Labor plays tricky games with these things. They put and they’re doing this time and time again. They put two pieces of legislation together. One they know we can’t support, and one they know we do support and they put us in those positions. We support that energy price relief. I’ll tell you why, Labor promised a $275 reduction in electricity bills. We now know from these Budget papers, that for a typical Australian family, there’s going to be a $500 energy price increase even after that relief. So, they’ve completely failed in their promise. Australians worked on the assumption that the promise was going to be kept. It hasn’t been kept. They deserve better than that. And that’s why unfortunately, and we do it with regret because it’s not this is not where we want it to be, but the truth of the matter is Australians deserved better than that, and Labor’s had to deal with it.</p>
<p>MICHELLE GRATTAN: Now you’ve seen the details of the changes to the petroleum resource rent tax. Are you going to support that?</p>
<p>ANGUS TAYLOR: We haven’t seen the details? That’s not right. We’ve seen a top line number and the thing about resource rent taxes, and we learnt this with the mining tax, is they are incredibly complex? </p>
<p>MICHELLE GRATTAN: Well, the industry supports them.</p>
<p>ANGUS TAYLOR: Well hang on. We are interested in what’s right for Australia and Australians. I hear a lot of commentators who wouldn’t normally say that the mining industry should be supported in whatever they say or the resources industry. We will make a judgement on this as we always do on what’s right for Australia. Again, I have to say if you want the price of something to go down, you don’t normally hit it with a tax. That being said, we will work through this carefully. I saw the mining resource rent tax way back in the in the last Labor government completely fail. Jim Chalmers was in Wayne Swans office at the time, it was a dog’s breakfast, a complete disaster. They are very complex taxes and are they going down? Is this going to be a bad tax? I don’t know. You’ve got to get into the detail. We’ll no doubt, we’ll get briefings on this over the coming weeks.</p>
<p>MICHELLE GRATTAN: Like you, I remember that big tax, and the big difference is that the mining industry opposed it very, very strongly. This time the industry is going along with it.</p>
<p>ANGUS TAYLOR: Well, a couple of things. Just because the mining industry supports something, doesn’t mean it’s right. And I think all people should understand that. We’re interested in what’s right for Australia and Australians and for energy prices for Australians in particular. So that’s got to be the test. As you know from that last mining tax, actually, the final version, the mining industry did support it, but it was a complete dog’s breakfast and we got rid of it because of that. It wasn’t helping. It was deterring investment, because it was sending the wrong signal to investors. So, it was a bad tax, and it was abolished as a result, but we’ll look at this one with all its complexity, and we’ll make a judgment about whether it’s good for Australia and Australians.</p>
<p>MICHELLE GRATTAN: Just finally, and I know you say you work through the whole budget but is there anything now that the Opposition will fight, will resist in Parliament?</p>
<p>ANGUS TAYLOR: Can I start by saying the things we’re going to support. There are some things in this budget we are going to support. So, we do support the instant asset write off, it’s only $20,000, but that’s important for small businesses. We do support the initiative on women’s safety. We think that’s really positive. The veteran’s payments, and the extension of the work bonus for pensioners. I think these are important initiatives. We proposed that sometime back, it’s not the full version of it, we’d prefer more, but it’s something for an extra six months and that will encourage pensioners into the workforce, and we like that. We’ll work our way through all the other initiatives. We have to say making government bigger in Canberra. It’s not necessarily the answer right now, particularly with these inflationary pressures at work, whether there’s any legislation on that probably not but there’s some initiatives around bigger government that we were concerned about, and we’ll work our way through that.</p>
<p>MICHELLE GRATTAN: Well talking about bigger government, just to finish off, what about the extra staff for politicians?</p>
<p>ANGUS TAYLOR: Well, it’s good question. So, the first thing I’ll say about it, is we’re pleased that there’s no budget for extra politicians in the budget. And whilst Albanese has been talking about more politicians, as you will remember a few weeks back he was saying maybe we need more politicians. We don’t agree with that. </p>
<p>MICHELLE GRATTAN: But what about the staff?</p>
<p>ANGUS TAYLOR: The staff issue, again we’ll work our way through that. It’s far more modest, I have to say, than more politicians…</p>
<p>MICHELLE GRATTAN: I’d be very surprised if you end up saying no.</p>
<p>ANGUS TAYLOR: Well, Michelle, I mean every penny has to be scrutinized right now because every penny risks raising inflation for Australians, and that’s why we’re taking a very principled approach to this. </p>
<p>MICHELLE GRATTAN: Angus Taylor, thank you very much for talking with us. </p>
<p>ANGUS TAYLOR: Thanks Michelle.</p>
<p>ENDS</p><img src="https://counter.theconversation.com/content/205431/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In this podcast, @michellegrattan canvasses the budget with Treasurer @JEChalmers, Shadow Treasurer @AngusTaylorMP and The Conversation's politics + society editor @amandadunn10Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1167262019-05-10T05:21:30Z2019-05-10T05:21:30ZFactCheck: do 86% of people visit the doctor for free?<blockquote>
<p>The number of people who attend the doctor for free has gone from 82% under Labor to 86% under us.</p>
<p><strong>– Health minister Greg Hunt, during the <a href="https://www.npc.org.au/speakers/the-hon-greg-hunt-mp-the-hon-catherine-king-mp/">health policy federal election debate</a> at the National Press Club, May 2, 2019.</strong></p>
</blockquote>
<p>During a debate with shadow health minister Catherine King, Hunt was defending the Coalition government’s track record on bulk-billing, claiming the number of people who visit their doctor without having to pay any out-of-pocket expense has risen since Labor’s time in power.</p>
<h2>Verdict</h2>
<p>The figures are accurate, but bulk-billing rates for GPs have been rising since a low point of 68.6% in 2004, meaning rates have risen during Labor’s time in office as well as since the Coalition won power in 2013. </p>
<p>Bulk-billing rates for specialist consultations are much lower than for GP visits, although they too have risen during the past decade.</p>
<h2>Checking the source</h2>
<p>In response to a request for a source on which the claim was based, a spokesperson for Hunt provided The Conversation with a spreadsheet of Department of Health data documenting annual Medicare statistics from 1984-85 to 2017-18.</p>
<p>It shows that 86.3% of “non-referred attendances (excluding practice nurse items)” at doctors’ surgeries were bulk-billed in 2017-18. In 2012-13, the last full financial year of the Labor government, the rate was 82.5%.</p>
<h2>Free doctor visits</h2>
<p>Patients who are <a href="https://www.humanservices.gov.au/individuals/subjects/how-claim-medicare-benefit/bulk-billing">bulk-billed</a> when they visit the doctor do not pay a fee; the doctor accepts the Medicare rebate as full payment. In this sense, bulk-billed patients can be said to be visiting the doctor “for free”.</p>
<p>Bulk-billing rates are <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Annual-Medicare-Statistics">published annually by the Department of Health</a>, and so are easy to compare over time. (The spreadsheet referenced by Hunt’s office can be downloaded via this <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Annual-Medicare-Statistics">page</a>.)</p>
<p>The bulk-billing rate for GP consultations over the past 20 years has been steadily increasing, from a low of 68.6% in 2003-4 to the most recent figure of 86.3% in 2017-18. In the last full financial year of the Labor government, in 2012-13, the rate was 82.5%.</p>
<p>There is no specific entry for “GP visits” in the government figures. The closest approximation is the data for “total non-referred attendances (excluding practice nurse items) out of hospital”. The bulk-billing rates for these services are shown in the upper line of the graph below.</p>
<iframe title="Bulk-billing rates" aria-label="Interactive line chart" src="https://datawrapper.dwcdn.net/irnP8/1/" scrolling="no" frameborder="0" width="100%" height="400"></iframe>
<p>The lower line in the graph shows bulk-billing rates for specialists. Patients visit non-hospital specialists (such as dermatologists) when referred by a GP, but bulk-billing is less common for these consultations. </p>
<p>Bulk-billing rates for these services have increased over the past decade, but are still quite low at 41.3%. This means most patients who use these specialist consultations make an out-of-pocket payment for them. </p>
<h2>Why is GP bulk-billing on the rise?</h2>
<p>The long-run increase in bulk-billing rates for GPs (and to a lesser extent, for specialists) is a bit of a mystery. In the mid-2000s, when the rising trend began, it seems likely this was spurred by the introduction of <a href="http://www9.health.gov.au/mbs/fullDisplay.cfm?type=item&q=10991&qt=item">bulk-billing incentives</a> which offer extra payments to GPs who don’t charge an out-of-pocket fee to patients, and <a href="https://theconversation.com/factcheck-were-just-67-of-gp-visits-bulk-billed-when-tony-abbott-was-health-minister-17652">the increase in the Medicare benefit</a> to 100% of the Medicare Benefits Schedule (MBS) fee for GP services – this was a one-off A$4.60 increase in the Medicare rebate for a standard patient visit.</p>
<p>However, when government funding for GP services began to be cut in real terms by the <a href="https://theconversation.com/what-is-the-medicare-rebate-freeze-and-what-does-it-mean-for-you-114169">medicare rebate freeze in 2013</a>, bulk-billing rates nevertheless continued to rise. </p>
<p>One possible explanation is that <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/joie.12098">competition between GPs</a> is keeping bulk-billing rates high. This theory is supported by the fact that the number of GPs in Australia is <a href="https://hwd.health.gov.au/summary.html#part-1">growing faster than the population</a>.</p>
<p>Also worth noting is that while the proportion of GP consultations that are bulk-billed has continued to rise, the <a href="https://theconversation.com/factcheck-have-average-out-of-pocket-costs-for-gp-visits-risen-almost-20-under-the-coalition-66278">fees paid</a> by the minority of patients who aren’t bulk-billed has continued to rise faster than inflation. - <strong>Peter Sivey</strong></p>
<h2>Blind review</h2>
<p>This FactCheck is fair and accurate with respect to the data presented on the percentage of GP consultations that are bulk-billed. However, the minister’s quote referred to the <em>percentage of people</em> who are bulk-billed. This is a slightly different metric to the <em>percentage of consultations</em>. </p>
<p>This is because the people who are more likely to be bulk-billed (such as concession card holders) are also more frequent users of GP services. In fact, there is <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/hec.3376">evidence</a> that the reforms in the mid-2000s, referred to above, led to higher costs for patients who were not concession card holders. This is further evidenced by a <a href="https://www.aihw.gov.au/getmedia/f6dfa5f0-1249-4b1e-974a-047795d08223/aihw-mhc-hpf-35-patients-out-of-pocket-spending-Aug-2018.pdf.aspx?inline=true">2018 report</a> from the Australian Institute of Health and Welfare (AIHW, which compiles official government statistics on health benefits) showing that in the 2016-17 financial year, 34% of patients who made at least one Medicare-subsidised GP visit incurred an out-of-pocket cost. In other words, only 66% of people were consistently bulk-billed during that year. </p>
<p>As these data have not been routinely reported by the AIHW, we cannot judge whether the percentage of people bulk-billed rose or fell during the Coalition’s term in office. We can say that in 2016-17 this percentage was much lower than that claimed by the health minister. - <strong>Kees Van Gool</strong></p>
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<span class="caption">The Conversation FactCheck is accredited by the International Fact-Checking Network.</span>
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<p><em>The Conversation’s FactCheck unit was the first fact-checking team in Australia and one of the first worldwide to be accredited by the International Fact-Checking Network, an alliance of fact-checkers hosted at the Poynter Institute in the US. <a href="https://theconversation.com/the-conversations-factcheck-granted-accreditation-by-international-fact-checking-network-at-poynter-74363">Read more here</a>.</em></p>
<p><em>Have you seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at <a href="mailto:checkit@theconversation.edu.au">checkit@theconversation.edu.au</a>. Please include the statement you would like us to check, the date it was made, and a link if possible.</em></p><img src="https://counter.theconversation.com/content/116726/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Sivey receives funding from the Australian Research Council.</span></em></p><p class="fine-print"><em><span>Kees Van Gool receives funding from Australian Research Council and the Australian Government.</span></em></p>Yes, 86% of GP visits were bulk-billed in 2017-18, up from 82% when Labor was in power. But they also rose under Labor, while the percentage for “patients” seems to be lower than the percentage for “visits”.Peter Sivey, Associate Professor, School of Economics, Finance and Marketing, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/722782017-02-09T19:11:54Z2017-02-09T19:11:54ZFactCheck: are bulk-billing rates falling, or at record levels?<blockquote>
<p>Falling bulk-billing rates … – <strong>Labor leader Bill Shorten, <a href="http://www.billshorten.com.au/address_to_the_national_press_club_canberra_tuesday_31_january_2017">address</a> to the National Press Club, Canberra, January 31, 2017.</strong></p>
<p>Bulk-billing is at record levels … – <strong>Prime Minister Malcolm Turnbull, <a href="http://malcolmturnbull.com.au/media/address-at-the-national-press-club-and-qa-canberra">address</a> to the National Press Club, Canberra, February 1, 2017.</strong> </p>
</blockquote>
<p>In speeches delivered 24 hours apart, Labor leader Bill Shorten and Prime Minister Malcolm Turnbull made conflicting claims about the state of bulk-billing rates in Australia. </p>
<p>A bulk-billed consultation occurs when the fee charged by the doctor or medical provider is equal to the benefit paid by Medicare - leaving zero out-of-pocket cost to the patient. The percentage of Medicare-funded consultations that are bulk-billed is referred to as the <em>bulk-billing rates</em>. These rates are widely seen as a proxy indicator of the accessibility of Medicare-funded health care. </p>
<p>Shorten said that bulk-billing rates are falling. The next day, Turnbull stood at the same lectern and said bulk-billing rates are at record levels.</p>
<p>Who was right? </p>
<h2>Checking the sources</h2>
<p>When asked for sources to support his statement, a spokesperson for Bill Shorten said:</p>
<blockquote>
<p>The government’s figures <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/1A9DB6D72BD5879ACA257BF0001AFE28/$File/MBS%20Statistics%2020163%20SepQtr%2020161006.pdf">show</a> that from June to September 2016 the bulk-billing rate for non-referred attendances fell from 84.6% to 84.1%.</p>
</blockquote>
<p>The spokesperson added:</p>
<blockquote>
<p>Through an information request through the Parliamentary Budget Office, we know that for item 23 – a standard GP consultation – we also know the bulk-billing rate is falling: from 82.81% in April 2016 to 82.38% in May 2016 to 81.97% in June 2016. This trend continues as is reflected in the rate falling for all non-referred attendances from June to September.</p>
</blockquote>
<p>The Conversation has independently verified those figures, which are not publicly available.</p>
<p>A spokesperson for Malcolm Turnbull told The Conversation that:</p>
<blockquote>
<p>The headline <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Medicare+Statistics-1">bulk-billing rate</a> of 85.1% for GP services is the official bulk-billing figure for 2015-16. This is the highest bulk-billing rate for GP services since 1984-85 (when Medicare started) – ie: record levels.</p>
<p>The headline bulk-billing rate of 78.2% for all Medicare services is the official bulk-billing figure for 2015-16. This is the highest bulk-billing rate for Total Medicare services since 1984-85 (when Medicare started) ie: again, record levels … the bulk-billing rate has been reported on a consistent basis under all governments since 1984-85.</p>
</blockquote>
<p>You can read the full responses from Shorten and Turnbull <a href="http://theconversation.com/full-responses-from-malcolm-turnbull-and-bill-shorten-72407">here</a>.</p>
<h2>Same source, different statistics</h2>
<p>Both Shorten and Turnbull’s statements are supported by the Department of Health’s Medicare Statistics – but Shorten has quoted <a href="http://health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">quarterly statistics</a> while Turnbull has quoted <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Annual-Medicare-Statistics">annual figures</a>. </p>
<p>They are also both looking at slightly different categories within the Medicare bulk-billing data collected by the Department of Health. </p>
<p>Overall, however, neither politicians’ sound bite provide a complete picture on what’s happening with bulk-billing in Australia. </p>
<h2>Yearly data on bulk-billing rates show record highs</h2>
<p>The chart below shows the annual bulk-billing statistics for the financial years from 1984-85 to 2015-16. It shows the bulk-billing rate for all Medicare claims combined and selected services – not just GP visits. </p>
<iframe src="https://datawrapper.dwcdn.net/UbmwH/2/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="520"></iframe>
<p>For overall Medicare claims (the red line), the bulk-billing rate in 2015-16 reached 78.2%. As correctly stated by Turnbull, this is an all-time high within the annual statistics. </p>
<p>Annual bulk-billing levels were also at record highs last financial year for non-referred GP attendances (which, by and large, means going to see your GP), pathology services and diagnostic imaging. </p>
<p>However, the bulk-billing rate for specialist services (the black line) in 2015-16 was at 30.2%, still below the record level set in 1995-96 of 32.5%. </p>
<p>So, technically, Turnbull is right to say bulk-billing rates are at record highs – as long as you use annual statistics and ignore the most recent data for the July to September 2016 quarter. </p>
<h2>But quarterly data show bulk-billing rates fell in the third quarter of 2016</h2>
<p><a href="http://health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">Quarterly statistics</a> on bulk-billing rates are shown in the chart below. </p>
<iframe src="https://datawrapper.dwcdn.net/3I9Lr/2/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="520"></iframe>
<p>As you can see, drilling down to the quarterly data reveals that bulk-billing rates fell in the third quarter of 2016.</p>
<p>For total Medicare claims (the red line), bulk-billing rates fell by 1.1% in between the June and September 2016 quarters. But it is worth noting that it fell from the highest bulk-billing rates on record (78.7%). </p>
<p>The fall between June and September 2016 is the 11th biggest quarterly decrease (in percentage terms) since Medicare’s inception. But while it was a relatively large drop in bulk-billing, it is still within the range of quarterly variability that we’ve seen historically. </p>
<p>For non-referred GP attendances (the blue line), the September quarter data shows a 0.6% fall in bulk-billing rates compared to June 2016. For pathology services (the orange line), the bulk-billing rate fell by 1.7% in the September quarter which is in addition to a 0.23% fall in the June quarter. </p>
<p>So, technically, Shorten is correct to say that the latest data show a fall in the bulk-billing rate – but he has zeroed in on a very recent fall that is within the range of normal variability. This recent drop doesn’t tell us much about the overall trend. </p>
<p>There is considerable variation in the quarterly bulk-billing rate. This makes it difficult, at this stage, to say anything certain about whether bulk-billing rates will continue to fall as part of a downward trend, or whether the latest quarterly decline is just an anomaly.</p>
<h2>Longer-term trends trump quarterly data</h2>
<p>The Department of Health is set to release the December quarter data later this month. This much anticipated release will give further insights into whether a downward trend in bulk-billing rates is emerging or whether the last quarter was a blip. </p>
<p>The figures for the last quarter of 2016 are likely to attract considerable attention as policymakers will be eager to learn whether the Medicare indexation freeze is having an effect on bulk-billing rates. </p>
<p>The freeze has been in place since 2014 and is set to continue until 2020. In effect, that means that the Medicare contribution to each health care service has not changed for the last three years. </p>
<p>Others have <a href="https://theconversation.com/confused-about-the-medicare-rebate-freeze-heres-what-you-need-to-know-59661">argued</a> that this will put pressure on doctor’s ability to bulk-bill. </p>
<p>Note that there was substantial negative bulk-billing growth in the period after the last Medicare indexation freeze and this did impact the annual level of bulk-billing.</p>
<h2>What bulk-billing rates don’t tell us</h2>
<p>One of the fundamental aims of Medicare is to improve access to care. Bulk-billing rates serve as an important proxy on how Medicare is performing with respect to allowing people of all income groups to access health care.</p>
<p>However, there are significant limitations. Bulk-billing rates cannot tell you, for example, whether bulk-billing services are fairly distributed across income groups or people in high health care need.</p>
<p>And headline bulk-billing rates do not reveal out-of-pocket costs for those patients who are not bulk-billed. </p>
<p>For example, for people who were not bulk-billed (almost 70% of specialist consultations) the average patient co-payment for a specialist consultation was $72 (<a href="http://health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">as shown in Table 1.5a in the quarterly Department of Health statistics</a>). </p>
<p>So any discussion of health care access needs to go beyond one simple headline measure.</p>
<h2>Verdict</h2>
<p>Technically, Shorten and Turnbull were both right – but their quotes don’t tell the whole story.</p>
<p>Shorten’s statement that we are seeing “falling bulk-billing rates” is correct if you look at the most recent quarterly statistics for total Medicare bulk-billing claims. But that fall was within the range of variation that we observe every quarter. Furthermore, one quarter of data is not enough to be making such generalised statements on total Medicare bulk-billing rates. </p>
<p>As Shorten’s <a href="http://theconversation.com/full-responses-from-malcolm-turnbull-and-bill-shorten-72407">full response</a> notes, there has also been a fall for three consecutive quarters in bulk-billing for GP visits lasting less than 20 minutes. However, this data is not publicly available so we can’t say for sure that there’s a trend in this particular item.</p>
<p>Turnbull’s statement that “bulk-billing is at record levels” is correct if you look at the yearly statistics, though it doesn’t factor in the decrease in bulk-billing in the third quarter of last year.</p>
<p>It is too early to say whether the recent quarterly fall in total Medicare bulk-billing rates was an anomaly or perhaps signals a broader trend. Data due for release within the next week will tell us more about the true state of bulk-billing in Australia. <strong>– Thomas Longden and Kees Van Gool</strong></p>
<hr>
<h1>Review</h1>
<p>This FactCheck is accurate and fair. It presents the statistical information most relevant to the problem and clearly contrasts the data that each politician drew from in making their statements. A couple of further points:</p>
<p>First, the <a href="http://theconversation.com/full-responses-from-malcolm-turnbull-and-bill-shorten-72407">full response</a> provided by Bill Shorten’s office mentions that bulk-billing rates specifically for item 23 (a standard level B GP consultation lasting less than 20 minutes) decreased in the three consecutive quarters to June 2016. Compared to the bulk-billing rates for the broader Medicare Benefit Schedule categories, this may suggest a slightly more convincing pattern of decline – but only for this particular item.</p>
<p>Second, bulk-billing rates vary considerably across states. Some states experienced a larger drop in bulk-billing rates in the September 2016 quarter than others. For example, Tasmania’s bulk-billing rate for non-referred GP services declined by more than 2% whilst the Northern Territory’s rate showed no decline. Likewise, the annual statistics show that Tasmania’s bulk-billing rate for non-referred GP services fell between 2014-15 and 2015-16 even as the country’s bulk-billing rate rose to record levels. </p>
<p>These variations in state trends can be obscured when we focus solely on data for Australia as a whole. <strong>– Rosemary Elkins and Stefanie Schurer</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/72278/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thomas Longden receives funding from the Department of Health.
</span></em></p><p class="fine-print"><em><span>Kees Van Gool receives funding from the Australian Research Council and the Department of Health.</span></em></p><p class="fine-print"><em><span>Stefanie Schurer receives funding from the ARC and the NHMRC.</span></em></p><p class="fine-print"><em><span>Rosemary Elkins does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In twin speeches to the National Press Club, Labor leader Bill Shorten said bulk-billing rates are falling, while Prime Minister Malcolm Turnbull said bulk-billing is at record levels. Who was right?Thomas Longden, Senior Research Fellow, University of Technology SydneyKees Van Gool, Health economist, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/662782016-10-19T04:35:27Z2016-10-19T04:35:27ZFactCheck: Have average out-of-pocket costs for GP visits risen almost 20% under the Coalition?<blockquote>
<p>These statistics ignore the fact that under this government, average out-of-pocket costs for GP visits are up by almost 20%. <strong>– Shadow minister for health and Medicare Catherine King, <a href="http://www.theaustralian.com.au/national-affairs/health/bulkbilling-rates-stay-high-for-poor-increasing-for-wealthy/news-story/b29d5bc3c91b3bc2aa5a68e527e9cff4">quoted in The Australian</a>, September 27, 2016.</strong></p>
</blockquote>
<p>In 2013, Labor introduced a <a href="https://theconversation.com/confused-about-the-medicare-rebate-freeze-heres-what-you-need-to-know-59661">fee freeze on Medicare rebates</a> in an effort to rein in the cost of government health spending. After winning the 2013 election, the Coalition government extended that fee freeze twice. Labor has now said it would lift the Medicare rebate freeze if elected.</p>
<p>In that context, the Australian Medical Association is <a href="https://ama.com.au/ausmed/health-costs-rise-rebate-freeze-bites">recommending</a> GPs raise their fees for a standard appointment of less than 20 minutes to A$78 from November 2016.</p>
<p>A news <a href="http://www.theaustralian.com.au/national-affairs/health/bulkbilling-rates-stay-high-for-poor-increasing-for-wealthy/news-story/b29d5bc3c91b3bc2aa5a68e527e9cff4">report</a> in The Australian quoted shadow minister for health and Medicare, Labor MP Catherine King, saying that average out-of-pocket costs for GP visits are up by almost 20% under the current government.</p>
<p>Is that right?</p>
<h2>Checking the source</h2>
<p>There are two components to pricing for medical services in Australia: bulk-billing rates, and rates for services that aren’t bulk-billed. </p>
<p>For services that aren’t bulk-billed, patients pay an “out-of-pocket cost”, which is the difference between the Medicare rebate and the fee the doctor charges. </p>
<p>When asked for sources to support the statement, a spokesperson for Catherine King said:</p>
<blockquote>
<p>The figure was taken from the <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">Medicare quarterly statistics to June 2016 (Tab 1.5b)</a>.</p>
<p>The average patient contribution for a patient billed GP service was $29.11 in September 2013, and is now $34.61 – a 18.9% increase. Accordingly, when we say “this Government” we are referring to the Abbott/Turnbull Liberal Government.</p>
<p>An additional source which might also be of use – the <a href="http://www.racgp.org.au/home">Royal Australian College of General Practitioners</a> (RACGP) <a href="http://www.racgp.org.au/yourracgp/news/media-releases/medicare-rebate-freeze-new-evidence-showing-patient-out-of-pocket-costs-increasing/">note</a> that in the last 12 months, out of pocket costs have risen by 6%.</p>
</blockquote>
<p>So King’s figure of “almost 20%” comes from a reliable source. </p>
<h2>Have average out-of-pocket costs for GP visits gone up by almost 20% since 2013?</h2>
<p>Yes. According to Medicare <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">data</a>, out-of-pocket costs for GP visits have increased by nearly 20% since the Coalition won government in 2013, as the chart shows.</p>
<iframe src="https://datawrapper.dwcdn.net/KSaJZ/1/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="409"></iframe>
<p>It’s not entirely clear why the cost consistently dips slightly in the December quarter, creating the step-shaped formation in the chart above. It may be because of the way the Department of Health processes Medicare claims around this time of year. Nevertheless, the trend is clearly upward over time.</p>
<p>And it’s not just out-of-pocket costs for GP visits that have been rising. The <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">Medicare quarterly statistics to June 2016</a> show out-of-pocket costs for all Medicare services have increased by 25.1% since September 2013. Over the same period, out-of-pocket costs for specialist appointments are up by 29.7%.</p>
<h2>Costs were also climbing under Labor</h2>
<p>However, that rise in out-of-pocket costs started well before the Coalition took power in 2013.</p>
<p>In fact, as the chart above also shows, under the previous Labor government out-of-pocket costs for GP services grew from around $18.31 in December 2007 (when Labor’s Kevin Rudd was sworn in as prime minister) to $29.11 when Rudd lost power in September 2013.</p>
<p>(As a side note, the rate of growth in out-of-pocket costs for specialist services has continued to rise faster than that for GPs.)</p>
<h2>While out-of-pocket costs rose, bulk-billing rates have too</h2>
<p>Interestingly, Medicare data also show bulk-billing rates continue to climb, even after the fee-freeze was introduced by Labor in 2013 and after the Coalition government decided to extend the freeze:</p>
<iframe src="https://datawrapper.dwcdn.net/3MtmG/1/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="400"></iframe>
<p>This may be because the best way to get many patients to return (and so maintain doctor earnings) is not to charge them at all – <a href="http://onlinelibrary.wiley.com/doi/10.1111/joie.12098/full">competition</a> is at play and is keeping bulk-billing rates high. </p>
<p><a href="http://onlinelibrary.wiley.com/doi/10.1111/joie.12098/full">Research</a> has shown that GPs in affluent areas are less likely to offer bulk-billing, and more likely to charge higher prices.</p>
<h2>Verdict</h2>
<p>Catherine King was correct to say that “under this government, average out-of-pocket costs for GP visits are up by almost 20%.” However, that’s not the whole story.</p>
<p>Average out-of-pocket costs for visiting a GP have been rising for some time and rose under Labor too. <strong>– Anthony Scott</strong></p>
<hr>
<h2>Review</h2>
<p>I agree that the statement by Catherine King is factually accurate, out-of-pocket costs for GP visits have increased by almost 20% since September 2013, but there is more to the story than that.</p>
<p>Out-of-pocket costs for going to see a GP also rose during the Rudd/Gillard period. In fact, using the same data that Catherine King refers to and shown in the article above, I have calculated that out-of-pocket costs rose <em>faster</em> under the last Labor government (in terms of percentage change) than the current Coalition government.</p>
<p>To compare how fast GP out-of-pocket fees grew under Labor (between 2007 and 2013) and the Coalition (between 2013 and 2016), I looked at the percentage change over four quarters. This is a way of using the quarterly data to see how things are changing every 12 months. </p>
<p>Using this method, the average yearly percentage change in out-of-pocket costs under Labor was around 8%. The average yearly percentage change under the Coalition to date (between 2013 and 2016) was 5.4%. (These figures only cover patients who were not bulk billed.)</p>
<p>An important point noted in the article is that bulk-billed patients, who are not represented in this figure, do not pay any out-of-pocket costs. Bulk-billing rates have increased over the same period, to record levels around 80%. </p>
<p>So the proportion of patients paying any out-of-pocket costs has actually been falling. Competition fostered by an increase in supply of GPs in recent years is likely keeping bulk-billing rates high and slowing the growth in out-of-pocket costs. <strong>– Peter Sivey</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/66278/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Scott's current research is funded from the National Health and Medical Research Council, Australian Research Council, Medibank Private Ltd, and the World Bank. He is a member of the Patient Identification Working Group of the Health Care Homes Implementation Advisory Group of the Australian Government Department of Health.
</span></em></p><p class="fine-print"><em><span>Peter Sivey receives funding from the Australian Research Council and has previously has previously been funded by Health Workforce Australia and the National Health and Medical Research Council.</span></em></p>Shadow minister for health and medicare Catherine King said under this government, average out-of-pocket costs for GP visits are up by almost 20%. Is that true?Anthony Scott, Professor, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/612992016-06-28T04:33:42Z2016-06-28T04:33:42ZElection FactCheck: Has the Coalition invested an average of $5 billion more per year into Medicare than Labor did?<blockquote>
<p>And for the record, despite Labor’s scare campaigns, the Coalition is investing an average of $5 billion more per year into Medicare than Labor did. <strong>– The Liberal Party of Australia’s <a href="https://medium.com/@LiberalAus/three-labor-lies-about-healthcare-a1c02b22541c#.viwfux6xk">Medium page</a>, June 19, 2016.</strong></p>
</blockquote>
<p>The Liberal Party has said that it is investing $5 billion more per year on average into Medicare than Labor did.</p>
<p>Is that right?</p>
<h2>Checking the source</h2>
<p>We asked the Liberal Party to provide the sources of the statement but we did not receive a reply before publication. However, we can test this against the available data that tracks Medicare expenditure.</p>
<h2>The meaning of ‘Medicare’</h2>
<p>One major uncertainty in the claim is that there are different definitions of what constitutes Medicare. </p>
<p>The two major areas we are focusing on as representing Medicare expenditure are the Medicare Benefits Schedule (MBS) and the Pharmaceutical Benefits Schedule (PBS). The MBS covers expenditure on medical services, and includes things like professional attendances, diagnostics and therapeutic procedures, while the PBS pays for drugs. The government budgetary definition of Medicare spending is only for the MBS. However, we believe the PBS is likely to be contained within the Liberal Party figure of $5 billion. </p>
<p>One area we are assuming is not included is state spending on public hospitals; if we were to include this, it may increase the difference in total spending between the two periods.</p>
<p>Below, the term PBS refers to both the PBS and the Repatriation Pharmaceutical Benefits Schedule (RPBS), which provides for certain classes of Department of Veterans’ Affairs beneficiaries. </p>
<h2>Tracking annual spending on the MBS, PBS and RPBS</h2>
<p>We therefore take the statement by the Liberal Party to mean that the sum of MBS, PBS and RPBS expenditure has increased by an annual average of $5 billion – but note the uncertainty in the definition.</p>
<p>The Department of Human Services provides month by month <a href="http://medicarestatistics.humanservices.gov.au/statistics/mbs_item.jsp">figures</a> on government expenditure for the MBS, PBS and RPBS. </p>
<p>Aggregate figures for this are shown below by quarter since January 2008 until the most recent complete quarter (ending March 2016). The transition point between the second Rudd government and the Abbott one is marked approximately on the graph with the vertical blue line.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/127679/original/image-20160622-19783-1xec1co.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/127679/original/image-20160622-19783-1xec1co.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/127679/original/image-20160622-19783-1xec1co.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=451&fit=crop&dpr=1 600w, https://images.theconversation.com/files/127679/original/image-20160622-19783-1xec1co.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=451&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/127679/original/image-20160622-19783-1xec1co.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=451&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/127679/original/image-20160622-19783-1xec1co.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/127679/original/image-20160622-19783-1xec1co.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/127679/original/image-20160622-19783-1xec1co.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Aggregate PBS/MBS/RPBS expenditure by quarter (2008 Q1-2016 Q1)</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Medicare spending under Labor</h2>
<p>Labor was in power between December 3, 2007, and September 18, 2013. To approximate this period, we used data from January 1, 2008 to September 30, 2013 to represent Medicare expenditure under the Labor government. (We used January 1 rather than the December 1 as some data sources report quarterly data, and January 1 lines up with this.)</p>
<p>Over the period of the Labor government, total PBS/RPBS spending was <a href="http://medicarestatistics.humanservices.gov.au/statistics/do.jsp?_PROGRAM=%2Fstatistics%2Fpbs_group_standard_report&group=0&VAR=BENEFIT&RPT_FMT=1&start_dt=200801&end_dt=201309">$46.577 billion</a>, and total MBS spending was <a href="http://medicarestatistics.humanservices.gov.au/statistics/do.jsp?_PROGRAM=%2Fstatistics%2Fmbs_group_standard_report&DRILL=on&GROUP=all+Medicare+by+MBS+categories&VAR=benefit&STAT=count&RPT_FMT=by+state&PTYPE=quarter&START_DT=200801&END_DT=201309">$93.931 billion</a>. This comes to $140.508 billion, which on an annual basis (based on a figure of 5.75 years to represent the period Labor was in power), is an average spend of $24.436 billion per year. </p>
<h2>Medicare spending under the Coalition</h2>
<p>For the period between October 2013 and May 2016 (representing the period when the Coalition has been in power), total spending under the MBS was <a href="http://medicarestatistics.humanservices.gov.au/statistics/do.jsp?_PROGRAM=%2Fstatistics%2Fmbs_group_standard_report&DRILL=on&GROUP=all+Medicare+by+MBS+categories&VAR=benefit&STAT=count&RPT_FMT=by+state&PTYPE=month&START_DT=201310&END_DT=201605">$54.448 billion</a>, and total PBS/RPBS spending was <a href="http://medicarestatistics.humanservices.gov.au/statistics/do.jsp?_PROGRAM=%2Fstatistics%2Fpbs_group_standard_report&group=0&VAR=BENEFIT&RPT_FMT=1&start_dt=201310&end_dt=201605">$26.713 billion</a>. </p>
<p>This totals $81.161 billion over two years and eight months, or $30.435 billion per year.</p>
<p>So, using our definition of what constitutes Medicare, the difference between the average annual Medicare spend under Labor and the average annual Medicare spend under the Coalition is about $5.999 billion per year.</p>
<p>Using these data, the claim made by the Coalition is true.</p>
<h2>Context matters</h2>
<p>However, it is not clear whether this increase in spending represents either an increase in spending per person, or an increase in service delivery. All we know so far is that the total dollar amount is bigger. </p>
<p>The Australian population has increased between the two time periods, meaning the per capita Medicare expenditure will not have increased at quite the same impressive-sounding rate as the raw figure of an average of $6 billion per year.</p>
<p>The second factor to consider is the rising cost of health care.</p>
<p>After adjusting for inflation and population growth, the average extra Medicare expenditure will be more modest than that indicated by the raw figures. And health costs are rising faster than inflation.</p>
<p>In other words, more Australians than before are accessing Medicare and most unit costs are likely to have, on average, risen. </p>
<h2>Verdict</h2>
<p>Without knowing the source for the Liberal Party’s claim, it was difficult to know what its “average of $5 billion more per year” claim was based on.</p>
<p>Assuming the claim refers to the sum of MBS, PBS and RPBS spending, the Liberal Party is correct. </p>
<p>Using our definition of what constitutes Medicare spending, the difference between the average annual Medicare spend under Labor and the average annual Medicare spend under the Coalition is about $6 billion per year.</p>
<p>However, care must always be taken drawing conclusions from the raw dollar amounts, since they do not take into account changing population size and inflation. <strong>– Richard Norman and Rachael Moorin</strong></p>
<hr>
<h2>Review</h2>
<p>The authors have valiantly attempted to fulfil a tricky brief because of the ambiguity of the claim. It is a sign of Australia’s complex health care system when we can’t even be precise about what constitutes Medicare funding. </p>
<p>As noted by the authors, there are different definitions of what constitutes Medicare. Here, the authors have assumed it means spending on the MBS and PBS/RPBS. On this basis they compare average annual MBS/PBS funding during the Gillard/Rudd era with funding during the Abbott/Turnbull era. The authors find that the Liberal Party has underestimated the additional annual spent by around $1 billion.</p>
<p>However, if we restrict the claim to Medicare spending only (excluding PBS/RBS spending), the average annual difference between the Abbott/Turnbull and Gillard/Rudd era is $4.13 billion - which implies that the claim is exaggerated by about 21%. </p>
<p>Under a broader definition of Australian government health spending, <a href="http://www.budget.gov.au/2014-15/content/fbo/html/index.htm">Budget Outcomes data</a> reveals totals of $62.012 billion (2011-12), $61.302 billion (2012-13), $63.983 billion (2013-14) and $65.696 billion (<a href="http://www.budget.gov.au/2014-15/content/fbo/html/index.htm">2014-15</a>). Under this definition, and comparing the last two years of the Gillard/Rudd era with the first two years of Abbott era, the increase in annual health funding is substantially less than $5 billion.</p>
<p>This brings us to the futility of the claim itself. I agree with the authors that the claim needs be considered in the context of population growth and price increases. After taking these two factors into account, expenditure has increased by a modest amount. While funding health care is an important issue, the claim made by the Liberal Party says nothing about whether the additional funding is delivering greater access to better health care. <strong>– Kees Van Gool</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/61299/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Norman receives funding from the National Health and Medical Research Council and the Australian Research Council.
</span></em></p><p class="fine-print"><em><span>Rachael Moorin receives funding from the National Health and Medical Research Council and Cancer Australia.
</span></em></p><p class="fine-print"><em><span>Kees Van Gool receives funding from the Commonwealth of Australia as represented by the Department of Health through a Centre for Research Excellence under the Australian Primary Health Care Research Institute. The information and opinions contained in it do not necessarily reflect the views or policy of the Australian Primary Health Care Research Institute or the Commonwealth of Australia or the Department of Health.</span></em></p>Has the Coalition invested an average of $5 billion per year more than Labor into Medicare?Richard Norman, Senior Research Fellow in Health Economics, Curtin UniversityRachael Moorin, Associate Professor, Health Policy & Management | School of Public Health, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/613602016-06-27T23:53:29Z2016-06-27T23:53:29ZElection FactCheck: has the Coalition cut bulk-billing for pathology and scans ‘to make patients pay more’?<blockquote>
<p>In their first term in office the Liberals … cut bulk-billing payments for pathology and diagnostic imaging to make patients pay more. – <strong>Shadow health minister Catherine King, <a href="http://www.catherineking.com.au/media/malcolm-cannot-be-trusted-on-medicare/">media release</a>, June 20, 2016.</strong></p>
</blockquote>
<p>The opposition has released political ads accusing the government of planning to privatise Medicare and warning of higher health costs in future – a campaign Prime Minister Malcolm Turnbull has <a href="http://www.news.com.au/national/federal-election/scare-campaign-could-hamper-attempts-to-boost-medicares-efficiency/news-story/fe9e1ae2b30ee2e2f8ec9aa817448579">called</a> “extraordinarily dishonest.” </p>
<p>As part of Labor’s Medicare campaign, shadow health minister Catherine King said that the government has “cut bulk-billing payments for pathology and diagnostic imaging to make patients pay more”. Incentives worth between $1.40 to $3.40 are paid direct to pathology service providers to encourage them to bulk-bill. </p>
<p>Is King right?</p>
<h2>Checking the source</h2>
<p>The Conversation asked Labor campaign media for sources to support Catherine King’s statement but did not hear back before deadline. </p>
<p>Health Minister Sussan Ley has <a href="http://www.health.gov.au/internet/ministers/publishing.nsf/Content/health-mediarel-yr2016-ley001.htm">argued</a> that bulk-billing incentives are not meant to be used to cross-subsidise other costs of doing business for <a href="https://theconversation.com/true-blood-cutting-through-confusion-about-pathology-cuts-55140">large companies</a> – some of which are owned by private equity firms – at a time when health care costs are growing.</p>
<h2>From ‘Don’t Kill Bulk Bill’ to a deal on rent</h2>
<p>In its December 2015 <a href="http://www.budget.gov.au/2015-16/content/myefo/download/MYEFO_2015-16_Final.pdf">Mid-Year Economic Fiscal Outlook</a>, the Coalition government announced a suite of bulk-billing changes aimed at saving $650 million over four years. It proposed removing bulk-billing incentives for pathology and diagnostic imaging services.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=440&fit=crop&dpr=1 600w, https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=440&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=440&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=553&fit=crop&dpr=1 754w, https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=553&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=553&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="http://www.budget.gov.au/2015-16/content/myefo/download/MYEFO_2015-16_Final.pdf">MYEFO 2015-16</a></span>
</figcaption>
</figure>
<p>Pathology Australia, which includes big players such as Genea and Sonic Healthcare Group among its members, has been central to how this issue has unfolded. Pathology Australia says its member organisations perform a majority of pathology testing within the private sector.</p>
<p>Pathology Australia collected nearly 600,000 signatures for its “<a href="http://www.dontkillbulkbill.com/">Don’t Kill Bulk Bill</a>” campaign, which warned that patients would face expensive pap smears and other costly tests due to government’s removal of the bulk-billing incentive for pathology services.</p>
<p>In May, Pathology Australia <a href="http://www.pathologyaustralia.com.au/2016/05/13/patients-win-in-pathology-announcements/">closed</a> its Don’t Kill Bulk Bill campaign after striking a <a href="https://www.liberal.org.au/latest-news/2016/05/13/coalitions-plan-access-affordable-pathology-all-australians">deal</a> with the government, aimed at ensuring pathology service providers who co-located their collection rooms inside a GP’s building were charged “fair market value” rents.</p>
<p>The bulk-bill incentive removal is still going ahead, but the idea is that many pathology service providers may now be better able to absorb the cost if they’re getting a cheaper deal on rent – instead of passing the extra cost onto patients. </p>
<p>Nick Musgrave, president of Pathology Australia, told The Conversation that:</p>
<blockquote>
<p>Decisions regarding billing practices are made by individual pathology providers … The regulatory changes announced by the Coalition to control excessive rents for pathology collection rooms will enable providers to more readily maintain current billing practices as would the maintenance of current funding. In the absence of either of these measures, providers had indicated they would not have been able to maintain current high levels of bulk-billing.</p>
</blockquote>
<p>Musgrave said the deal to regulate rents for collection rooms will “more readily enable pathologists to maintain current billing practices” whether or not they are members of Pathology Australia. (You can read his full response <a href="http://theconversation.com/full-response-from-pathology-australia-61438">here</a>.)</p>
<p>But some other pathology service providers have said the deal with the government doesn’t take them into account.</p>
<h2>Not all pathologists</h2>
<p>Pathology is no longer a small industry, with the Sonic group reporting annual revenue of about <a href="http://www.sonichealthcare.com/about-us/corporate-overview/">$4 billion</a> – but not all businesses are on this scale.</p>
<p>Catholic Health Australia is one of the service providers that says the deal doesn’t take them into account. This group also represents pathology service providers, including many in regional and rural areas.</p>
<p>According to its spokesman:</p>
<blockquote>
<p>Independent and not-for-profit pathology providers may have to adopt co-payments simply in order for their services to remain viable … Turnbull’s deal with ‘the pathology sector’ was made without taking not-for-profit providers into account.</p>
</blockquote>
<p>The group said that the rents deal will:</p>
<blockquote>
<p>disproportionately assist the larger corporate providers and will not be sufficient to adequately offset the cuts imposed on smaller providers by removing the bulk-billing incentives.</p>
</blockquote>
<p>You can read Catholic Health Australia’s full comment <a href="http://theconversation.com/full-response-from-catholic-health-australia-61439">here</a>.</p>
<p>So, whether or not you’ll pay more for pathology tests after July 1 depends mostly on who owns that practice or pathology service provider, and whether they can afford to absorb the cost of the changes themselves or choose to pass on these costs to patients.</p>
<p>Labor has <a href="http://www.smh.com.au/federal-politics/federal-election-2016/federal-election-labor-promises-to-continue-funding-bulkbilling-incentives-for-pathology-radiology-20160618-gpmd3m.html">pledged</a> to reverse cuts to the Medicare Benefits Schedule pathology bulk-billing incentives – which it believes will improve access to bulk-billed pathology services, but would also drive up the cost to taxpayers. </p>
<p>Others, such as the Grattan Institute, <a href="http://grattan.edu.au/wp-content/uploads/2016/02/935-blood-money.pdf">argue that</a> there are ways save money in pathology, saying that:</p>
<blockquote>
<p>patient co-payments for tests should be abolished. Patients aren’t the real consumers of pathology tests – the doctors who order and use them are. </p>
</blockquote>
<h2>What about scans?</h2>
<p>The rents deal struck between the government and Pathology Australia doesn’t cover scans.</p>
<p>Australian Diagnostic Imaging Association (ADIA), which represents private providers of radiology services, <a href="http://www.adia.asn.au/public/3/system/newsAttachments/ADIA%20Pathology%20Deal%20Response%20May16.pdf">said</a> the rents deal was “cold comfort for the millions of patients needing vital radiology services”. </p>
<p>The government plans to remove bulk-billing incentive payments for radiology services in January 2017. However, ADIA has <a href="http://www.adia.asn.au/public/3/system/newsAttachments/050616_FINAL_ADIA%20welcomes%20Coalition%20commitment%20on%20access%20to%20diagnostic%20i%20....pdf">secured</a> a commitment from the government to “work with the diagnostic imaging sector on structural reforms to provide patients with certainty on affordable access to services”.</p>
<p>The review will happen before January 2017.</p>
<p>ADIA has also said that patient rebates for diagnostic imaging have been frozen since 1998, with patient gaps now averaging <a href="http://www.adia.asn.au/public/3/files/ADIA%20Rebate%20Response%2031May16.pdf">$100</a>, and has voiced concern that Labor’s pledge to reverse the decision to remove the bulk-billing incentive does not go far enough. Labor has said it will restore indexation in January 2017 to all services provided by GPs, allied health and other health practitioners and medical specialists – but that scans are not included.</p>
<p>ADIA has <a href="http://www.adia.asn.au/public/3/system/newsAttachments/100616%20ADIA%20calls%20Labor%20failure%20to%20index%20DI%20a%20broken%20promise%20on%20Medicare....pdf">called</a> on Labor to expand its indexation election promise to include diagnostic imaging service providers too.</p>
<h2>Verdict</h2>
<p>Catherine King was right to say that in its first term of office, the Coalition government cut bulk-billing payments for pathology and diagnostic imaging. That is scheduled to come into effect on July 1, 2016, for pathology services and in January 2017 for radiology services.</p>
<p>But the second part of her statement – “to make patients pay more” – didn’t tell the whole story. Pathology Australia’s deal with the government on rent regulation means some pathologists may be able to keep bulk-billing. Others, however, may not. </p>
<p>Whether or not patients will pay more as a result of the bulk-billing incentive removal depends on whether your pathology or radiology service provider passes on the cost to customers. <strong>– Helen Dickinson</strong></p>
<hr>
<h2>Review</h2>
<p>This is a sound FactCheck. I would further note that the Grattan Institute <a href="http://grattan.edu.au/wp-content/uploads/2016/02/935-blood-money.pdf">reports</a> that almost 99% of pathology tests for out-of-hospital patients are bulk-billed, an increase from 93% a decade ago.</p>
<p>St John of God, a large not-for-profit health group, is <a href="http://www.clinicallabs.com.au/media/1037/australian-clinical-labs-media-statement-22nd-june-2016.pdf">selling</a> its pathology operations to Clinical Labs. The removal of the bulk-billing incentive payment may have put them in a position where they would have passed increased costs onto patients. </p>
<p>The unmentioned driver behind the rising cost to the health budget of pathology bulk-billing is clinicians practising <a href="http://www.racgp.org.au/afp/2014/may/we-live-in-testing-times/">defensive medicine</a> – GPs and specialists reasonably ordering tests “to be sure” or “safe”, even where it may not be needed.<strong>– Bruce Baer Arnold</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/61360/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Helen Dickinson receives funding from the federal Department of Health.
</span></em></p><p class="fine-print"><em><span>Bruce Baer Arnold does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Labor’s shadow health minister Catherine King, said that the government has “cut bulk-billing payments for pathology and diagnostic imaging to make patients pay more”. Is that right?Helen Dickinson, Associate Professor, Public Governance, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/548342016-02-21T19:02:44Z2016-02-21T19:02:44ZBlood money: pathology cuts can reduce spending without compromising health<figure><img src="https://images.theconversation.com/files/112034/original/image-20160218-1264-hy6gi6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">More than three in every four Medicare-billed pathology tests are analysed by one of two big corporations: Sonic Healthcare and Primary Health Care.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-371602273/stock-photo-nurse-collecting-a-blood-from-a-patient.html?src=0TcOiQ0DCgrrETgH0IhSXw-7-9">Soda_O2/Shutterstock</a></span></figcaption></figure><p>The <a href="http://www.budget.gov.au/2015-16/content/myefo/html/index.htm">Mid-Year Economic and Fiscal Outlook</a> (MYEFO) set the cat among the pathology pigeons late last year. One of the government’s flagged changes, estimated to save around A$100 million a year, was <a href="https://theconversation.com/myefo-2015-at-a-glance-52298">to abolish</a> the bulk-billing incentive Labor introduced in 2009. </p>
<p>The industry mobilised, threatening to charge consumers significant out-of-pocket co-payments for pathology tests for blood, tissue and other bodily fluids. The threatened increases were well in excess of the A$1.40 to A$3.40 cut to the bulk-billing incentive, which companies received for not charging patients out-of-pocket charges. </p>
<p>A campaign was organised, focusing on the <a href="http://www.mamamia.com.au/medicare-pap-smears-not-free/">increased cost of pap smears</a>. It included a <a href="https://www.change.org/p/health-minister-susan-ley-keep-pap-smears-and-pathology-services-free">petition</a> supported by more than 200,000 people. </p>
<p>Health Minister Sussan Ley escalated her rhetoric, pointing out that Medicare was not <a href="http://www.health.gov.au/internet/ministers/publishing.nsf/Content/health-mediarel-yr2016-ley001.htm">designed</a> to be a guaranteed bankable revenue for corporations, nor a taxpayer-funded payment to cross-subsidise pathology companies for other costs of doing business. </p>
<p>The minister noted:</p>
<blockquote>
<p>… complaints from stock exchange-listed pathology companies about this MYEFO decision have revolved around impacts on ‘shareholders’ – not patients – exposing what is really motivating these criticisms.</p>
</blockquote>
<p>The MYEFO-induced furore about bulk billing provides context for a wider “root and branch” review of pathology payments. As the Grattan Institute’s report, <a href="http://grattan.edu.au/home/health/">Blood Money</a>, published today, shows, there is money to be saved in pathology. This can be done in ways that don’t affect patient access to needed tests.</p>
<h2>Industry profit</h2>
<p>The Blood Money report addresses several questions. First, why is bulk billing on the agenda for pathology tests at all? All out-of-hospital pathology tests should be bulk-billed. </p>
<p>There should be no “incentive” for pathology corporations to bulk-bill. Rather, bulk-billing should be a requirement to participate in this market. </p>
<p>The place of co-payments in health care is highly contested. Those who argue for co-payments say they help to reduce demand, particularly for frivolous use of health care. </p>
<p>But consumers almost never initiate pathology services. Professionals order tests to assist them to make a diagnosis or to track a patient’s condition. In those circumstances, there is no theoretical argument to use financial disincentives for consumers, in the form of co-payments, to limit demand. </p>
<p>Industry consolidation and technological advances have completely reshaped the pathology industry over recent decades. But the way governments pay for pathology services hasn’t kept up. </p>
<p>Fee-for-service was originally a way for individual consumers to pay their medical practitioner for professional services. Health insurance then evolved to provide insurance for those costs. Medicare, when it was introduced, followed the same model. </p>
<p>But what was suitable for cottage-industry medical practice is not necessarily appropriate as a payment system for big corporations. More than three in every four Medicare-billed pathology tests are analysed by one of two big corporations: <a href="http://www.asx.com.au/asx/research/company.do#!/SHL">Sonic Healthcare</a> and <a href="http://www.asx.com.au/asx/research/company.do#!/PRy">Primary Health Care</a>. Both companies suffered a share price drop when the MYEFO cuts were announced.</p>
<p>Many parts of the pathology schedule are now highly automated. The large corporations benefit from economies of scale as the costs of an additional test to run through an analyser are trivial. But Medicare pays the same for the tests processed by the machine for the thousandth patient as it does for the first.</p>
<h2>Same service, lower costs</h2>
<p>A <a href="https://ama.com.au/sites/default/files/documents/Final_Discussion_Paper_Review_of_Pathology_Services_1_March_2011.pdf">2011 discussion paper</a> on pathology funding proposed that Medicare negotiate with providers to share the benefits of technological change by discounting the schedule for high volumes by, say, 5%. The Commonwealth Department of Health should dust off this paper and use it as a basis for proper commercial negotiations with the big pathology corporations. </p>
<p>The bulk-billing incentives should be in the mix as well. Serious negotiations of that kind would save taxpayers about A$175 million per year; A$100 million from bulk-billing incentives, the balance from a 5% trim.</p>
<p>The government should also consider going to tender for the right to bill Medicare for out-of-hospital pathology. In other words, companies would bid to be involved in the out-of-hospital pathology market by offering to provide tests at particular prices. </p>
<p>The tender specification might incorporate provisions that the price to be paid by government goes down after a particular number of tests is performed. </p>
<p>A pilot scheme of tendering should be established in Victoria for 2017, with the scheme allowing for multiple successful winning bids to ensure continued competition in the pathology marketplace. Tenders could be rolled out in other states after an evaluation of the Victorian experience.</p>
<p>Tendering should generate greater savings than the 5% trim. </p>
<p>Tendering introduces price competition into the pathology market. Rather than companies responding to a government-regulated price, they would have to specify the prices at which they think they can operate. If a company bids at too high a price, they may not be among the group of successful tenderers. </p>
<p>The <a href="https://ama.com.au/sites/default/files/documents/Final_Discussion_Paper_Review_of_Pathology_Services_1_March_2011.pdf">2011 pathology discussion paper notes</a> strong savings from other departments tendering pathology services: </p>
<ul>
<li><p>Victoria has tendered out most of its regional
public pathology services for more than 20 years. Negotiated prices are 65-75% of Medicare fees, equating to a 10-20% saving.</p></li>
<li><p>Defence tendered pathology services for military personnel. It settled at 80% of Medicare fees, without patient initiation fees. This was equivalent to a 5% discount. </p></li>
</ul>
<p>Neither paid the equivalent of a bulk-billing incentive. Further savings, on top of a negotiated trim, could therefore be achievable.</p>
<p>There are savings to be made in pathology payments and they should come from narrowing the margins of profitable corporations, not from cutting services to the ill and vulnerable. </p>
<p>In a time of increasing deficits, the government must prioritise reforms that reduce spending without compromising the health of Australians. Pathology payment reform provides an opportunity to do this – an opportunity that should not be missed.</p><img src="https://counter.theconversation.com/content/54834/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Duckett does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Industry consolidation and technological advances have completely reshaped the pathology industry over recent decades. But the way governments pay for pathology services hasn’t kept up.Stephen Duckett, Director, Health Program, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/449082015-07-24T04:03:42Z2015-07-24T04:03:42ZWhat you should expect from your GP<figure><img src="https://images.theconversation.com/files/89454/original/image-20150723-22826-fkmg3w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The major impediment to realising the ideal of good general practice is that few patients understand it.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/proimos/6870109454/">Alex Proimos/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>Australia spent <a href="http://www.myhealthycommunities.gov.au/Content/publications/downloads/NHPA_HC_Frequent_GP_attenders_Media_Release_March_2015.pdf">$16 billion on GP-related health care in 2012-13</a>. That’s about $690 for each person. Given that our public health system means each of us is paying for health care through our taxes, what should we expect from our doctors?</p>
<p>Generally, Australians expect ready access to a general practitioner when they’re ill, and they want a GP who will listen carefully to what they say. But there are many other services you should expect.</p>
<p>These include: dealing with ongoing problems; anticipating and preventing diseases you’re at risk of developing; promoting good health generally and providing appropriate health education to this end; helping you get the most out of all health-care professions when you’re ill; doing house calls when necessary; being compassionate and knowledgeable about the process of death and dying; and generally being your health advocate.</p>
<h2>Empowering patients</h2>
<p>One measure of a good GP is when she takes two minutes to diagnose your sore throat and then says, “Good, we now have ten minutes of the consultation left to examine you for skin cancers, review your asthma and answer any questions you have about your health.”</p>
<p>This preventive medicine approach aims to stop or detect the earliest evidence of disease and deal with it. At the very least, your GP should ensure that you know your blood group, blood pressure and cholesterol levels, and your family’s history of important disorders, such as heart attacks, diabetes, aortic aneurysm, glaucoma and certain types of cancers. Being aware of these risks means you’re likely to detect abnormalities earlier and get them treated.</p>
<p>Your GP should also teach you how to get the best from the health system. This includes knowing when you shouldn’t bother seeing a doctor. You should probably avoid your local GP when you have a cold, for instance, but not put off a consultation for new, severe symptoms until Friday evening. </p>
<p>The former will just help spread the virus causing the cold throughout your doctor’s waiting room. The latter will result in referral to a hospital emergency department since the necessary community-based investigative facilities will be closed.</p>
<p>At some stage, you’re going to be too ill or too infectious to get to your local doctor’s surgery. You should expect that your GP will make a house call when that happens. </p>
<p>House visits are time-consuming and uneconomic for doctors. But they’re useful because they give her unique insights into your interpersonal relationships, financial circumstances and lifestyle. These insights will give her a better view of how you’re really coping.</p>
<h2>That extra little bit</h2>
<p>You never know when you’ll get really unwell out of the usual surgery hours. So your GP should ensure you know what sort of medical help is available to you and how to access it.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/89594/original/image-20150724-20950-1c8t2m.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/89594/original/image-20150724-20950-1c8t2m.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=388&fit=crop&dpr=1 600w, https://images.theconversation.com/files/89594/original/image-20150724-20950-1c8t2m.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=388&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/89594/original/image-20150724-20950-1c8t2m.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=388&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/89594/original/image-20150724-20950-1c8t2m.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=487&fit=crop&dpr=1 754w, https://images.theconversation.com/files/89594/original/image-20150724-20950-1c8t2m.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=487&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/89594/original/image-20150724-20950-1c8t2m.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=487&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">You should expect more than episodic care for a series of acute illnesses from your general practitioner.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/zunami/4352535111/">Claus Rebler/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>She should have good records that contain a summary of your current and pertinent past problems. Until the personally controlled electronic health record (PCEHR) system is working, you should have several copies of this summary. You can take it to any after-hours medical service you visit, or use it when you’re travelling. It will save you a lot of time, medical investigation and money.</p>
<p>A common cause for a patient suing her doctor is for her failure to diagnose a serious condition. But patients who go from doctor to doctor so that no single health professional ever has the opportunity of seeing their changing symptoms and signs put themselves in diagnostic jeopardy. </p>
<p>Medicare provides for the preparation of various health management plans. Used properly by a patient’s regular GP, they’re useful. But beware of other practices, which you don’t regularly visit, that want to maximise their income by doing a health management plan for you. </p>
<p>Finally, your GP should be your health advocate. The modern health system is complex and patients can get lost in it. They can also get lost on hospital waiting lists. The advocacy of your GP can often work a bureaucratic miracle.</p>
<h2>Endangering the species</h2>
<p>Sounds positively utopian, doesn’t it? But the problem is you. The major impediment to realising this ideal of good general practice is that few patients understand the task of general practice and the part that GPs could and should play in their health care. </p>
<p>Indeed, many health-care consumers place convenience above quality. They attend any clinic where “there’s no waiting, they give you what you want and you don’t have to pay”. </p>
<p>But these same patients go and see their old family doctor when they’re really sick or worried. Sadly, they seem unaware that their consulting behaviour renders their family GP a financially endangered species.</p>
<p>Now that you know what you should expect, I hope you will become a more discerning and demanding consumer of health care, who expects more from your GP than quick, bulk-billed, episodic care for a series of acute illnesses. </p>
<p>If you expect a lot, a lot is what you may get. It may mean that your local parliamentary member starts listening to your expectations, and the federal government stops destroying quality general practice.</p><img src="https://counter.theconversation.com/content/44908/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Max Kamien was the Foundation Professor of General Practice at the University of Western Australia. He now is the Provost and Corlis Fellow of the Western Australian Faculty of the Royal Australian College of General Practitioners and a part-time remote area locum GP.
He has been trying to improve patients' expectations of their GP for several decades, including during an appearance on Ockham's Razor on 18/3/2001.</span></em></p>Australia spent $16 billion on GP-related health care in 2012-13. Given that our public health system means each of us is paying for health care through our taxes, what should we expect from doctors?Max Kamien, Emeritus Professor of General Practice & Corlis Fellow of the RACGP, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/353112014-12-10T02:30:46Z2014-12-10T02:30:46ZBack to the future with Coalition attacks on Medicare bulk billing<p>In the government’s latest “scraping away the barnacles” of unpopular and blocked policies, prime minister Tony Abbott and health minister Peter Dutton have announced they’re abandoning the plan to have doctors charge a $7 co-payment for consultations. Facing a massive backlash from both the medical profession and the public, the budget measure was facing almost certain defeat in the Senate.</p>
<p>Abbott and Dutton have outlined an “optional” co-payment, which makes doctors responsible for charging it. It reduces the rebate doctors receive for treating patients by $5 and freezes it until July 2018. General practitioners can pass on this cut by charging patients who do not have health-care (concession) cards and are aged over 16. </p>
<p>Both versions of the co-payment policy are just the latest stoush in long battle over bulk billing, which lies at the centre of Medicare, and the scope of universal health coverage in Australia. Bulk billing – where general practitioners bill Medicare directly without charging patients upfront fees – has, in fact, played an unusually prominent role in Australian health policy conflicts. </p>
<p>“Free” access to the gatekeeper role of general practice enraged conservative critics of Medicare from the start. At the same time, defenders of Medicare treat it as a line in the sand; any attack on bulk billing is equated with an assault on Australia’s public health system.</p>
<h2>A doomed policy</h2>
<p>The original policy, announced in the <a href="http://www.budget.gov.au/2014-15/content/glossy/health/download/Health.pdf">May budget</a>, was complicated and poorly explained. Here’s a brief summary of what it entailed. </p>
<p>From July 1, 2015, previously bulk-billed patients would pay $7 towards the cost of standard medical consultations and out-of-hospital pathology and imaging services. Some patients – including children under 16 and health-care card holders (low-income earners and pensioners) – would be exempt from the co-payment after their first ten visits in a calender year. </p>
<p>In effect, the structure of bulk billing would remain intact. Doctors could still bill Medicare directly, but their patients would have to pay the $7 co-payment. If they charged the full amount, general practitioners would receive an additional $2 in the rebate from the government. The other $5 raised by the co-payment would go into a Medical Research Future Fund, which would start disbursing the interest it garnered after it had collected $20 billion.</p>
<p>The policy was <a href="https://www.mja.com.au/journal/2014/200/7/copayments-general-practice-visits">attacked from all sides</a>. Defenders of Medicare saw it as another round in the Coalition’s attempts to undermine universal coverage. And the Australian Medical Association (AMA) – long ambivalent about bulk billing – criticised the complexity of the arrangements, and demanded the exclusion of vulnerable people. </p>
<p>Australia already has one of the <a href="http://www.publish.csiro.au/paper/AH14087.htm">largest and most complex set of co-payments</a> for medical services in the developed world. Proponents of a “price signal” for health seemed ignorant of the bewildering array of price signals already faced by anyone with a serious and continuing illness. </p>
<p>And no one, including the government, has proffered any modelling to justify the claim that a co-payment would make the system more efficient, rather than just add to the existing obstacle course. </p>
<p>Even the medical research community seemed either bemused and embarrassed by the linking of the co-payment to a new Medical Research Future Fund. This move, which seemed calculated to divide medical groups, confused the government’s message that the measure was part of its program of “budget repair”. </p>
<p>It was hard to find anyone with a good word to say about the policy. And its doom in the Senate seemed certain. </p>
<p>An official report released in September showing federal government spending on health <a href="http://www.aihw.gov.au/publication-detail/?id=60129548871">has been declining</a> – and will fall further with cuts in transfers to state hospital systems – made the justification for the change look even more fragile.</p>
<h2>Back to the future</h2>
<p>So how is the new policy likely to be received? The AMA has always been comfortable with co-payments, but not with cuts in the rebate. Its national president, Brian Owler, has described the announcement as a “<a href="https://ama.com.au/media/government%E2%80%99s-new-co-payment-model-%E2%80%98mixed-bag%E2%80%99">mixed bag</a>”. </p>
<p>The “optional” co-payment ends the administrative nightmare of charging concessional patients for just their first ten visits. It also removes proposed co-payments on pathology and other diagnostic tests.</p>
<p>But it remains a cost shift from the government to individuals, with doctors squeezed in the middle. It may have severe effects on the viability of practices in poorer areas where general practitioners may not feel they have the option of passing on the rebate cut. </p>
<p>The odd thing about this saga is that <a href="https://www.newsouthbooks.com.au/books/the-making-of-medicare/">we have been here before</a>. In 1996, the Howard government froze GP rebates. Over the next three years, this squeezed doctors’ incomes, which fell almost 20% in relation to average weekly earnings. </p>
<p>One result was a slow abandonment of bulk billing, not out of ideological hostility, but to maintain practice incomes. Bulk billing had been at a high of 80.6% of services in 1996, but fell to 68.5% in 2003-04. The shift was even greater in areas with fewer general practitioners, especially in remote and rural places.</p>
<p>A political backlash developed; the government faced hostile criticism from doctors, the AMA, and patients. The response was “A Fairer Medicare”, launched in April 2003. It brought in new subsidies for bulk billing in rural and remote areas and incentives for bulk billing health-care card holders. </p>
<p>Opponents argued it was nothing of the sort; health-care card holders were only a minority of those in need, and the policy continued to push general practitioners out of bulk billing. The Senate, controlled by Labor and the Greens, blocked “A Fairer Medicare”.</p>
<p>With a federal election looming, John Howard appointed Tony Abbott as the new Minister for Health, gave him an open cheque book and a mandate to remove bulk billing as an electoral issue. </p>
<p>“Medicare Plus” restored the level of all general practitioner rebates, with extra incentives (which remain in place) to bulk bill children and pensioners. The restoration led to a return of bulk billing. And by 2006, it was back to 78% of services. Tony Abbott used these bulk billing figures to proclaim himself “Medicare’s greatest friend”.</p>
<p>Will the latest changes meet the fate of “A Fairer Medicare”? The Abbott government’s changes will be introduced by regulation, avoiding an immediate Parliamentary vote. But they can be reversed by a Senate vote when Parliament reconvenes in early 2015. </p>
<p>The exclusion of some low-income groups and children may make the new policy more palatable to the cross-benchers who will decide its fate. But the freeze of the rebate and long-term pressure to abandon bulk billing mean neither general practitioners nor many of their patients will be appeased.</p><img src="https://counter.theconversation.com/content/35311/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jim Gillespie receives research funding from NHMRC and WentWest/ Western Sydney Partners in Recovery.</span></em></p>In the government’s latest “scraping away the barnacles” of unpopular and blocked policies, prime minister Tony Abbott and health minister Peter Dutton have announced they’re abandoning the plan to have…Jim Gillespie, Deputy Director, Menzies Centre for Health Policy & Associate Professor in Health Policy, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/176522013-09-03T20:47:57Z2013-09-03T20:47:57ZFactCheck: were just 67% of GP visits bulk-billed when Tony Abbott was health minister?<figure><img src="https://images.theconversation.com/files/30665/original/4cpq9bpm-1378271215.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Alex E Proimos Flickr</span> </figcaption></figure><figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/30586/original/8k8x35w7-1378179235.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/30586/original/8k8x35w7-1378179235.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/30586/original/8k8x35w7-1378179235.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/30586/original/8k8x35w7-1378179235.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/30586/original/8k8x35w7-1378179235.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/30586/original/8k8x35w7-1378179235.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/30586/original/8k8x35w7-1378179235.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Is it true that bulk-billing rates were lower when Tony Abbott ran Health?</span>
<span class="attribution"><span class="source">Flickr/Alex E Proimos</span></span>
</figcaption>
</figure>
<blockquote>
<p><strong>“The bulk-billing rates are at historic highs now. Visits to GPs are 82% bulk-billed. When Tony Abbott was minister it was 67%.” Health minister Tanya Plibersek, <a href="http://www.abc.net.au/news/2013-08-27/national-press-club-tanya-plibersek-and-peter/4916118">National Press Club Health Debate</a>, 27 August.</strong></p>
</blockquote>
<p>A central tenet of the Australian healthcare system is that doctors can set their own fees. The basic premise of Medicare is that the government pays a fixed sum for each type of service (the Medicare rebate), with the patient paying the remainder. When services are bulk-billed, the doctor charges the government directly, and only receives the Medicare rebate, with patients paying nothing. </p>
<p>The claim the health minister is making relates to the proportion of general practitioner (GP) visits that are bulk-billed. Plibersek made a similar claim in a <a href="http://www.health.gov.au/internet/ministers/publishing.nsf/Content/98F7756CEE338EC3CA257B3200789244/$File/TP020.pdf">media release</a> on 19 March this year, which said “the new figures were in stark contrast to when Tony Abbott was health minister when bulk-billing rates hit rock bottom at just 67%”.</p>
<h2>What does the data show?</h2>
<p>The best source of evidence regarding bulk-billing is <a href="http://health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">the Department of Health and Ageing figures</a>. These show bulk-billing rates by quarter going back to 1989. The graph below shows the aggregate figures for GP services in Australia. State-specific figures for bulk-billing suggest that where you live matters – there is considerable difference depending on where the doctor is based. New South Wales has the highest rates of bulk-billing, consistently around 5 percentage points higher than the Australian average. The Northern Territory and the Australian Capital Territory have low bulk-billing rates.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/30302/original/2fvh77gy-1377835681.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/30302/original/2fvh77gy-1377835681.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/30302/original/2fvh77gy-1377835681.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=360&fit=crop&dpr=1 600w, https://images.theconversation.com/files/30302/original/2fvh77gy-1377835681.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=360&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/30302/original/2fvh77gy-1377835681.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=360&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/30302/original/2fvh77gy-1377835681.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=452&fit=crop&dpr=1 754w, https://images.theconversation.com/files/30302/original/2fvh77gy-1377835681.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=452&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/30302/original/2fvh77gy-1377835681.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=452&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Bulk-billing rates over time. Source: Department of Health and Ageing.</span>
</figcaption>
</figure>
<p>The trend in GP bulk-billing shows a steady increase until the mid-1990s, then a steep decline from 1999 until 2003. Rates have been increasing steadily since, with the greatest increase between 2003-2005. </p>
<p>Abbott became the Minister for Health in <a href="http://www.abc.net.au/pm/content/2003/s961826.htm">October 2003</a>, replacing Senator Kay Patterson. This point is denoted in the graph as the first vertical blue line. The fourth quarter of 2003 figure for the proportion of GP services that were bulk-billed was 65.7%; presumably the 67% figure relates to the 66.7% figure reported for the third quarter of 2003, which was the best estimate of the prevailing rate of bulk-billing at the point at which Abbott became health minister.</p>
<p>Abbott’s tenure as health minister is shown by the four-year period between the two blue lines in the graph. During this time, GP bulk billing rates climbed from around 66% to around 77%. </p>
<p>Certainly bulk-billing rates have continued to increase since then, and it is correct to say that they are at an historic high. But it is also correct that the trend towards higher bulk-billing rates began under the previous government, particularly when Abbott was health minister.</p>
<p>Thus, if the claim is that at some point during Abbott’s tenure as health minister, the proportion of GP services that were bulk-billed was 67%, as is claimed in the media release, that is reasonable. However, this figure does not represent a typical bulk-billing rate during the four years of Abbott’s ministry, so is not a fair or reasonable reflection of the data.</p>
<h2>What’s behind the rise in bulk-billing?</h2>
<p>A number of factors, both on the supply and demand side of GP services, might explain the trend in bulk-billing rates before 2003 and since then. In 2000, the Australian Medical Association claimed in a submission to a Senate inquiry that the rebate for general practice had not kept pace with the costs of providing the services, forcing more doctors to charge, and hence not to bulk-bill. This is a plausible explanation for at least some of the fall in bulk-billing before 2003. </p>
<p>A range of government policy changes during the period from 2003-2007 contributed to higher bulk-billing rates for GPs (notably MedicarePlus and Strengthening Medicare). Two of these are likely to have contributed to higher bulk-billing rates. The first was the introduction of an <a href="http://www9.health.gov.au/mbs/fullDisplay.cfm?type=item&q=10991&qt=item">incentive payment</a> (starting at $5-$7.50, depending on location and patient, and now at $7.05-$10.65) for bulk-billed consultations.</p>
<p>The second was the increase in the Medicare benefit to 100% of the Medicare Benefits Schedule (MBS) fee for GP services, as introduced in January 2005. The MBS fee reflects the cost of providing the service and, prior to this point, the government paid 85% of this fee for each GP service. This effectively increased the price per service that GPs could receive when they bulk-billed.</p>
<p>Another important factor contributing to rising bulk-billing rates has been the increasing numbers of GPs. The Australian Institute of Health and Welfare estimated that <a href="http://www.aihw.gov.au/publication-detail/?id=10737419680">the number of primary care practitioners</a> in 2009 was 25,707, a significant increase from 20,616 in 1999. Greater competition may mean that GPs need to compete on price to attract sufficient patients. We know this from the differences in bulk-billing rates by region, with areas with fewer GPs having much lower bulk-billing rates.</p>
<h2>Verdict</h2>
<p>Bulk-billing rates are indeed at record highs, and at the level stated by Tanya Plibersek. However, the comparison with rates under Tony Abbott is misleading, and demonstrates the problem with comparison of only two time points. The bulk-billing rate was that low at the beginning of Abbott’s tenure as health minister, but the typical rate over the period was higher. Indeed, the four years in which he was minister were characterised by a sharp increase in bulk-billing.</p>
<hr>
<h2>Review</h2>
<p>This fact check is a thorough and fair account of the bulk-billing issue during Tony Abbott’s period as health minister.</p>
<p>The debate over bulk-billing can only be understood as part of broader philosophical differences over the role of Medicare. Is it a welfare safety net, which should be targeted at those who can’t pay their own way? Or is it a universal insurance scheme to which everyone contributes according to income, receiving in return a right to coverage?</p>
<p>As the above article demonstrates, bulk-billing rates declined during the first two terms of the Howard government. There were a number of causes, but these were all linked to government policy, a point underlined by Prime Minister John Howard’s repeated reference to Medicare as a “safety net” scheme. </p>
<p>This suggested that bulk-billing should be confined to the poor. <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/health-budget2003-fact-hfact1.htm">A Fairer Medicare policy</a>, announced by the Howard government in April 2003, offered GPs incentives to increase bulk-billing rates, but was restricted to low-income health card holders, with extra incentives in rural areas. </p>
<p>The decline of bulk-billing happened slowly, a policy of drift rather than public announcements. However, by 2003 it had become a source of political discontent, a problem for a government facing election the next year. It was a major element in Abbott’s appointment as Minister for Health in October 2003.</p>
<p>As this fact check notes, Abbott’s assumption of the portfolio was followed by moves to restore bulk-billing. The government’s language also changed. Abbott introduced the Medicare Safety Net as embodying “the principle of universality”, and pointed to the rise in bulk-billing rates as evidence that the Howard government was now “Medicare’s greatest friend”. <strong>- James Gillespie</strong></p>
<p><em>(James Gillespie is the co-author of <a href="http://www.newsouthbooks.com.au/books/the-making-of-medicare/">The Making of Medicare: the politics of universal health care in Australia</a>, published by UNSW Press this month.)</em></p>
<p><div class="callout">The Conversation is fact checking political statements in the lead-up to this year’s federal election. Statements are checked by an academic with expertise in the area. A second academic expert reviews an anonymous copy of the article.Request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/17652/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jim Gillespie receives funding from the National Health and Medical Research Council.</span></em></p><p class="fine-print"><em><span>Richard Norman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>“The bulk-billing rates are at historic highs now. Visits to GPs are 82% bulk-billed. When Tony Abbott was minister it was 67%.” Health minister Tanya Plibersek, National Press Club Health Debate, 27 August…Richard Norman, Senior Research Fellow in Health Economics, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.